Information Technology and U.S. Competitiveness
seeking to monopolize its product areas. The Antitrust Division of the Department of Justice has investigated Microsoft to determine whether its economic success was due to price fixing, predatory strategies aimed at putting other companies out of business, or attempts to create a monopoly. A showdown with the government was avoided in 1995 because Microsoft and the Justice Department were able to reach an 11th-hour agreement. Now, however, the company is under investigation once again for trying to integrate its operating system into the Internet. This harassing of an American company simply because that company enjoys a high market share is clearly beyond the scope of what the nation's antitrust statutes were designed to accomplish
Moreover, while there are exemptions to U.S. antitrust law to permit American companies to enter into joint research and production ventures, disgruntled foreign and domestic competitors still can threaten a company with a lawsuit simply because it is more competitive. Today, the burden of proof is on the accused to "prove" themselves innocent. While a case can be made that antitrust laws still are needed to prevent the monopolization of a market, clearly the current scope of U.S. antitrust laws is too broad and threatens to destroy America's competitiveness in a crucial high technological product area.
3. Lowering the Cost of Capital. While some consider capital costs in the U.S. to be low enough, others would argue - mainly those engaged in the research and development of new products - that it could be made lower. One way to spur investment in information and other high-tech industries is for the U.S. to reduce the cost of capital. Capital is needed to research and develop new and better high-tech products. Today, most companies raise capital in two ways: Either they sell stock, or they borrow money from a bank. In both areas, the U.S. maintains policies that increase the cost of raising capital.
The capital gains tax drains the pool of capital U.S. companies need to compete with foreign firms and investors, and would-be investors often spend their money rather than incur an additional tax by buying and selling stocks. The capital gains tax removes incentives for people to invest. Investment is a crucial source of capital for businesses. Less investment means less money for businesses to expand operations, hire new workers, or research and develop new products. Eliminating the capital gains tax would remove the penalties for investing.
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